randa
Air Arabia Case Study
1)
Air Arabia is a cost efficient airline that currently operates a total fleet of 23 aircraft, serving 65 routes from three hubs in Morocco, UAE, and Egypt. It hopes to expand to cover many areas of the world such as Europe and the Indian subcontinent and increase its fleet to over 50 by 2015 solely without working with any other companies. It is obvious that Air Arabia is utilizing the concentration growth strategy; the concentration growth strategy focuses on its primary line of business and increases the number of products offered or markets served in that primary business. As we can see, Air Arabia is both increasing its products (by increasing its fleet) as well as its markets (by expanding to other areas of the world).
Air Arabia has a great advantage in its line of work as it follows a cost leadership strategy, having the lowest costs in its industry. It is highly efficient as it firmly pursues an aggressive low cost strategy that aims at controlling costs, enhancing profitability, and improving quality and reliability of operations. Examples of its business scheme are the use of single passenger class/single aircraft to save on training, maintenance, and multi-cabin costs and its optional (paid for) in-flight food and beverage to save on catering costs. Its overall model is based on reducing costs in a smart way to offer better prices. Thus, it has an advantage over other airlines that do not utilize such a low cost strategy, who for instance have multi-cabin aircrafts or who cater food. Air Arabia is thus able to attract more customers through its low prices.
1)
Air Arabia is a cost efficient airline that currently operates a total fleet of 23 aircraft, serving 65 routes from three hubs in Morocco, UAE, and Egypt. It hopes to expand to cover many areas of the world such as Europe and the Indian subcontinent and increase its fleet to over 50 by 2015 solely without working with any other companies. It is obvious that Air Arabia is utilizing the concentration growth strategy; the concentration growth strategy focuses on its primary line of business and increases the number of products offered or markets served in that primary business. As we can see, Air Arabia is both increasing its products (by increasing its fleet) as well as its markets (by expanding to other areas of the world).
Air Arabia has a great advantage in its line of work as it follows a cost leadership strategy, having the lowest costs in its industry. It is highly efficient as it firmly pursues an aggressive low cost strategy that aims at controlling costs, enhancing profitability, and improving quality and reliability of operations. Examples of its business scheme are the use of single passenger class/single aircraft to save on training, maintenance, and multi-cabin costs and its optional (paid for) in-flight food and beverage to save on catering costs. Its overall model is based on reducing costs in a smart way to offer better prices. Thus, it has an advantage over other airlines that do not utilize such a low cost strategy, who for instance have multi-cabin aircrafts or who cater food. Air Arabia is thus able to attract more customers through its low prices.